Urgent need for US$90 trillion investment: Lord Stern tells finance ministers

07 October 2016

One of the world’s leading experts on climate change tells Commonwealth finance ministers that much more money needs to be pumped into tackling the problem.

One of the world’s leading experts on climate change has been telling Commonwealth finance ministers that much more money needs to be pumped into tackling the problem. Professor Lord Stern, co-chair of the new Climate Economy report, said that investments of US$90 trillion were needed and that the time for action was now.

Outlining the critical need for transformative change in how development is financed, Lord Stern told ministers meeting at the IMF in Washington DC that the window of opportunity is as narrow as two or three years.

Lord Stern said: “The next couple of decades, and particularly the next two or three years, will be critical to the future of sustainable development. We can and should invest in and build cities where we can move and breathe and be productive, while protecting the natural world that underpins our livelihoods. This will require not only better policies but also a sea change in the financial system itself to make it fit for purpose for the scale and quality of investment we now need.”

Currently, 62 countries have ratified the Paris Agreement on Climate Change, inching it closer to being entered into force. More than half of these are Commonwealth countries, including 25 small states most vulnerable to the impacts of climate change. The Commonwealth paved the way to the commitments being made, after agreeing to advocate together for a climate change ‘speed limit’ of two degrees and an aspiration for 1.5 degrees.

Commonwealth Secretary-General, Patricia Scotland, said: “The Commonwealth is at the forefront of ensuring the climate change agreements come into force, just as we led the charge to set temperature rise limits. Our 53 nations fought for this in Paris and we succeeded.”

Many Commonwealth countries are small island states and are already dealing with the devastating consequences of climate change. As Lord Stern spoke to ministers, Hurricane Matthew was battering The Bahamas, having left a trail of destruction across the Caribbean. Climate shocks such as Hurricane Matthew exemplify the vulnerability of small states, and the urgent need for climate finance to build resilience, mitigation and adaptation.

The Secretary-General continued; “We cannot tell people reeling in the aftermath of Hurricane Matthew’s brutality, that there is no urgency to respond to climate change. We cannot tell people in the Pacific where sea-levels are visibly rising, that we have time to wait. Small states are most vulnerable to climate change. Yet on their own they can lack the resources to become climate resilient and develop sustainably. Together, the Commonwealth can open doors and get all voices heard at the highest levels. Together, we can realise our shared goals.”

The Commonwealth recently launched a Climate Finance Access Hub to help countries draw down funding set aside to respond to and protect themselves from the effects of climate change. It aims to give small island developing states and least developed countries improved capacities to access the $100 billion of funds set aside for climate finance by 2020.

Notes to Editors:
Finance Ministers will gather for the Commonwealth Finance Ministers Meeting (CFMM) on 6 October 2016, at the headquarters of the International Monetary Fund in Washington DC, USA. The Finance Minister of India, Hon. Shri Arun Jaitley, will chair the discussions. Professor Lord Stern, I.G. Patel Professor of Economics and Government, at the London School of Economics will deliver the keynote address on the economics of climate change

Find out more online: thecommonwealth.org/cfmm2016

The Sustainable Infrastructure Imperative: Financing for Better Growth and Development is the third major report of  Global Commission on the Economy and Climate’s flagship project, the New Climate Economy.

Nicholas Herbert Stern, Baron Stern of Brentford, is a British economist and academic. He is I. G. Patel Professor of Economics and Government and Chair of the Grantham Research Institute on Climate Change and the Environment at the London School of Economics (LSE).

Lord Stern was the Head of the Stern Review on the Economics of Climate Change, a landmark study released by Her Majesty’s Treasury of the UK Government in October 2006. This 700-page report assessed a broad range of evidence on the impacts of climate change and its economic costs, and has since become one of the most influential reports on climate change.

The Commonwealth is a voluntary association of 53 independent and equal sovereign states. It is home to 2.2 billion citizens, of which over 60% are under the age of 30. The Commonwealth includes some of the world’s largest, smallest, richest and poorest countries, spanning five regions. Thirty-one of its members are small states, many of them island nations.

The Commonwealth Secretariat provides guidance on policy making, technical assistance and advisory services to Commonwealth member countries. We support governments to help achieve sustainable, inclusive and equitable development. Our work promotes democracy, rule of law, human rights, good governance and social and economic development. We are a voice for small states and a champion for youth empowerment.